The Power to Regulate Pollution

During my vacation I read The Quartet: Orchestrating the Second American Revolution, 1783-1789, by Joseph J. Ellis. Ellis tells the story of the writing and passage of the US Constitution, orchestrated, he asserts, by George Washington, Alexander Hamilton, John Jay and James Madison (the quartet).

Before the adoption of the Constitution, the thirteen states were essentially independent countries who had won their independence but failed to found a new country. The “United States” were always referred to in the plural. The genius of the quartet, says Ellis, was the compromise they crafted in the Constitution in the debate over federal vs. state power. States were understandably reluctant to relinquish their sovereignty, but the quartet knew that the new nation, to survive, had to have federal power – to levy taxes, provide for common defense, and regulate commerce among the states. The Constitution enumerates the powers of the federal government. The Bill of Rights – the first ten amendments to the Constitution, passed simultaneously — enumerates the rights retained by the states and the people, limitations on federal power. The tenth amendment provides: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The contours of this compromise are still being debated in courts across the land. “States rights” were fighting words in the civil war, and today are the battle cry of states seeking to curb the federal government’s regulation of health care, water quality, voting rights, and abortion.

A similar battle is taking place between states and municipalities, over cities’ right to regulate industrial activities within their jurisdictions.Witness the Texas Legislature’s recent passage of House Bill 40, which restricts the ability of cities to regulate oil and gas drilling within city limits.

Another recent example is BCCA Appeal Group, Inc. v. Cityof Houston, now pending in the Texas Supreme Court. BCCA Appeal Group, the “Business Coalition for Clean Air Appeal Group,” is a coalition of industrial companies, including Exxon Mobil and Dow Chemical, formed largely to challenge regulations in courts. The city limits of Houston encompass many large industrial facilities. BCCA sued Houston, challenging its ordinances that regulate air emissions and quality. BCCA contends that those ordinances are preempted by state law.

In Texas, responsibility for enforcing air and water quality laws is vested in the Texas Commission on Environmental Quality (TCEQ), which has authority to enforce and pass rules dealing with air and water quality under the Texas Clean Air Act and provisions of the Texas Water Code. In 2007, the City of Houston passed an ordinance establishing its own air quality regulatory compliance program, essentially adopting the same laws and regulations that the TCEQ enforces. The ordinance requires companies to register their facilities and imposes fines for violations. The City says that it decided to enforce its own rules because of TCEQ’s lax enforcement efforts. In its brief, the City says that BCCA is challenging its ordinance because the industry “currently enjoys what it perceives to be a permissive regulatory approach from the TCEQ” and it fears regulation by “a vigilant watch dog.”

The Houston Court of Appeals upheld the ordinance. It held that BCCA “failed to show that the Legislature intended to preempt the Ordinance with ‘unmistakable clarity,’ and thus, failed to meet its extraordinary burden to establish that the ordinance is invalid.”

In Texas, as in many other states, most cities are “home rule” cities, which means that they derive their regulatory power from the state’s constitution, and their powers are limited only by express act of the state legislature. Acts of the legislature are not presumed to limit home-rule cities’ power unless the legislature acts with “unmistakable clarity.”

BCCA has appealed to the Texas Supreme Court, who have now heart oral argument. Trade groups including the Texas Oil and Gas Association, Association of Electric Companies of Texas Inc., the US Chamber of Commerce, the National Association of Manufacturers, and Texas Chemical Council, have weighed in with amicus briefs supporting BCCA. In an unusual move, Governor Greg Abbott has filed an amicus brief supporting BCCA, “to defend the executive branch’s constitutional authority to implement and enforce state policy without interference from city officials.” He says the City’s ordinance will “undermine TCEQ’s efforts to achieve voluntary remediation and compliance” with TCEQ’s rules.

So the Governor and BCCA and other industry lobbying groups have teamed up to defend TCEQ’s compliance policies against a city that wants to more vigorously enforce TCEQ’s own regulations. Like House Bill 40, a further effort to erode home-rule cities’ powers.

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